NEW YORK: A federal appeals court on Monday revived antitrust claims in private US litigation accusing global banks of conspiring to manipulate the Libor benchmark interest rate.
The 2nd US Circuit Court of Appeals in Manhattan said a lower court judge erred in dismissing the antitrust portion of the case against Bank of America Corp, JPMorgan Chase & Co and 14 other banks on the ground that the investors failed to allege harm to competition.
These investors “have identified an illegal anticompetitive practice (horizontal price-fixing), have claimed an actual injury placing in a worse position as a consequence of the banks’ conduct, and have demonstrated that their injury is one the antitrust laws were designed to prevent,” Circuit Judge Dennis Jacobs wrote for a three-judge panel.
Libor underpins hundreds of trillions of dollars of transactions and is used to set rates on credit cards, student loans and mortgages.
In litigation that began in 2011, investors accused big banks of suppressing Libor during the financial crisis to boost earnings or make their finances appear healthier.
Monday’s decision overturned a March 2013 dismissal by US District Judge Naomi Reice Buchwald in Manhattan of what she has called a “substantial portion” of the litigation, including federal antitrust claims that could justify triple damages.
Thomas Goldstein, a lawyer who argued the investors’ appeal, was not immediately available for comment. Robert Wise, a lawyer who argued on the banks’ behalf, declined to comment. - Reuters
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